- Kontec GmbH is one of Germany's top providers of OEM development
services for engines and exhaust gas after-treatment

- In 2016, doubling of revenue and EBITDA over 2014 figures expected

- Purchase price of 7 million shares for complete acquisition

September 28, 2015 05:59 AM Eastern Daylight Time

KÖNIGSWINTER, Germany--(BUSINESS WIRE)--Twintec AG (WKN A0LSAT), a leading provider of exhaust gas
after-treatment products, today announced the acquisition of Kontec GmbH
effective 30 September 2015. The binding purchase agreement was signed,
and the transaction is expected to be completed early in the fourth
quarter of 2015. The economic transfer will take place effective 1
October 2015. The acquisition is a significant strategic and economic
milestone for Twintec in connection with its envisaged growth in the OEM
business over the next years. Kontec GmbH is one of Germany's top
providers of OEM development services for engines and exhaust gas
after-treatment. At Twintec, the acquisition will result in a
considerable expansion of its OEM business, which is expected to see a
surge in growth in the next few years. Twintec expects the acquisition
to boost revenue to EUR 55 to 60 million and push up EBITDA to around
EUR 3.5 million in the next financial year. Both figures would
approximately represent a doubling of these key financials compared with
the 2014 financial year. The purchase price for the complete acquisition
of Kontec amounts to 7 million shares created by way of a capital
increase in return for contributions in kind. Kontec founder and
managing director Klaus Bänsch will be appointed to the Management Board
of Twintec AG effective 1 October 2015 and assume the position of Chief
Technical Officer (CTO). In return Armin Rosbach will resign as Chief
Financial Officer (CFO).

Kontec develops, designs, simulates and validates engines and exhaust
gas after-treatment systems for leading German OEMs. In the past, the
company has repeatedly implemented successful projects for customers
together with Twintec. After joining forces with Twintec, Kontec is now
in the position to market complete exhaust gas after-treatment systems,
such as Twintec's BNOx system for reducing nitrogen oxide emissions in
the low temperature range, to OEM customers. Twintec/Kontec will
therefore become the top supplier of and service provider for OEM
exhaust gas after-treatment systems. With more than 450 highly qualified
employees in Europe, the company now has the critical mass for long-term
success in the OEM business. In 2014, Kontec GmbH generated revenue of
EUR 34 million and EBITDA of EUR 1.7 million. The acquisition puts
Twintec in a perfect position to benefit from the expected surge in
growth in the OEM business stemming from the stricter laws taking effect
starting in 2018. Twintec has already signed agreements with several
renowned manufacturers that are expected to boost revenue substantially
in the coming years. In addition, the Twintec technology is currently in
the development phase at several manufacturers prior to a release for
series production.

Besides strategic synergies, the acquisition unlocks considerable
potential on the cost side as well. From 2016 onward, costs are expected
to be reduced by around EUR 1.5 million per year. Combining research and
development efforts will result in capital expenditure savings of some
EUR 0.5 million per year. Taken together, this is expected to increase
free cash flow by EUR 2.0 million. Starting in 2017, the additional
business opportunities provided by the acquisition will also generate
further momentum for growth. In addition to achieving organic growth,
Twintec also plans to expand further by making acquisitions. The company
has a good track record in this regard. Baumot AG, which was acquired in
2014, has contributed to increasing revenue, lowering costs, expanding
the company's technology portfolio and improving access to international
markets. Swiss-based Baumot AG was integrated into the Twintec Group
very successfully in 2014.

About Twintec:

Twintec is a leading provider of products for the after-treatment of
exhaust gases, such as highly efficient SCR systems for low temperature
applications reducing nitrogen oxide emissions as well as active and
passive diesel particulate filters, both for fitting at manufacturers
and for retrofitting on existing vehicles. The solutions are used for
various applications, including in agricultural machines, construction
equipment, light and heavy-duty utility vehicles and passenger cars.
Twintec AG is a listed holding company with four subsidiaries and over
450 highly qualified employees. Kontec GmbH is together with its
subsidiary DIF (Die Ideenfabrik) GmbH the OEM development arm of the
company, providing top OEMs with development, design, simulation and
validation services for low-emissions engines and exhaust gas
after-treatment systems. Through its subsidiary Interkat GmbH, Twintec
also provides catalytic coating services for various other industrial
applications. The subsidiaries Baumot AG and Twintec Technologie GmbH
serve the emissions technology market with retrofitting and aftermarket
solutions along with related services.

Twintec AG's shares are listed in the Entry Standard segment of the
Frankfurt Stock Exchange.